FEDERAL COURT OF AUSTRALIA Dugac v Official Trustee in Bankruptcy, in the matter of the Bankrupt Estates of Mijo and Mario Dugac [2007] FCA 574 IN THE MATTER OF THE BANKRUPT ESTATES OF MIJO AND MARIO DUGAC ANKICA DUGAC v THE OFFICIAL TRUSTEE IN BANKRUPTCY NSD 182 OF 2007 LINDGREN J 3 APRIL 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 182 OF 2007 IN THE MATTER OF THE BANKRUPT ESTATES OF MIJO AND MARIO DUGAC BETWEEN: ANKICA DUGAC Applicant AND: THE OFFICIAL TRUSTEE IN BANKRUPTCY Respondent JUDGE: LINDGREN J DATE OF ORDER: 3 APRIL 2007 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The proceeding be dismissed. 2. The applicant pay the respondent's costs of the proceeding. 3. The documents comprising exhibit A1 may be returned to the applicant. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 182 OF 2007 IN THE MATTER OF THE BANKRUPT ESTATES OF MIJO AND MARIO DUGAC BETWEEN: ANKICA DUGAC Applicant AND: THE OFFICIAL TRUSTEE IN BANKRUPTCY Respondent JUDGE: LINDGREN J DATE: 3 APRIL 2007 PLACE: SYDNEY REASONS FOR JUDGMENT 1 By an application filed on 9 February 2007 the applicant ('Ms Dugac'), who is not represented, seeks an order for the "return" of a property at 28 Brantwood Street, Sans Souci, being the land the subject of Certificate of Title, Volume 7827, Folio 187 ('the Property'). The application refers to the property as having been taken from Ms Dugac unlawfully and illegally by the respondent ('the Official Trustee'), and having being sold without her knowledge. According to the form of application, if it is not possible for the property itself to be returned to her, Ms Dugac seeks compensation. She complains that no one had the right to sell her property without her permission and her signature. 2 The matter has a long history. I asked Ms Dugac whether she was ready for the application to be heard today and she said that she was, because the Court already had the documents involved. Mr McNally, solicitor, appeared for the Official Trustee. The Official Trustee had filed an affidavit of Robert John Cruickshanks sworn 20 March 2007 and had prepared written submissions. I proceeded to hear the application finally. On the hearing, Ms Dugac tendered further documents which were admitted as exhibit A1. As well, exhibit RJC1 to Mr Cruickshanks' affidavit was admitted. 3 Ms Dugac and her late husband, Mijo Dugac, their son, Mario Dugac, and their daughter, Maria Turkovic, were, at the beginning of the story, registered as proprietors, as tenants in common to equal shares of the Property. On their own petition, filed on 9 December 1975 and accepted on that date, the husband, Mijo Dugac, and the son, Mario Dugac, became bankrupt. In the result, their one quarter interests in the Property vested in the Official Trustee upon the commencement of their bankruptcies and was property divisible among their creditors in their joint and several bankrupt estates: see Bankruptcy Act 1966 (Cth) ('the Act') ss 58(1) and 116(1). 4 In proceeding W508 of 1975 in this Court, Ms Dugac obtained an order on 6 February 1987 that on any partition or sale of the Property, the Official Trustee pay to her certain amounts in respect of council rates, water rates and mortgage instalments that she had paid, and improvements that she had made, together with interest. The order was made by Evatt J. The amount for council rates, water rates and mortgage payments was $17,442.96. The amount in respect of improvements was $6,000. Thus, the total amount (not including interest) was $23,442.96. 5 There was an appeal, and on 1 March 1988, a Full Court of the Federal Court varied Evatt J's orders by substituting for the sum of $6,000 a sum of money to be calculated by reference to a formula. On 7 September 1989, on the application of the Official Trustee, the Supreme Court of New South Wales ordered, pursuant to s 66G of the Conveyancing Act 1919 (NSW), that Tasos Castrisos and Robert John Cruickshanks ('the Trustees') be appointed as statutory trustees for the sale of the Property. The Supreme Court ordered that the Trustees be empowered to sell the land and to deduct certain commission and expenses of any real estate agent, legal costs and other expenses as well as their own remuneration from the proceeds of sale. That Court also ordered that they pay to Ms Dugac the amounts referred to in the orders of this Court dated 6 February 1987 and 1 March 1988; that they pay one half of the balance to the Official Trustee; and that they pay the remaining one half to Ms Dugac and her daughter, Maria Turkovic, in equal shares. 6 The Trustees sold the property on 19 January 1990. The net proceeds of sale amounted to $169,259.29. After some correspondence, amounts totalling $121,302.73 were paid from the proceeds of sale to Ms Dugac. 7 Since 1990, Ms Dugac has made various complaints and requests for explanation as to the disposal of the proceeds of sale. I need not summarise those complaints but note that they were made on some 10 occasions extending from 24 October 1990 to July 2000. On two occasions, in May 2000 and September 2002, Ms Dugac filed notices of motion in the Supreme Court proceeding seeking relief which included damages against the Official Trustee. Ms Dugac claimed, in that proceeding, that the Property had been sold without authority and that the Official Trustee and the Trustees had failed to account for the proceeds of sale. On both occasions the motions were dismissed. 8 I have read carefully the documents that Ms Dugac tendered on the hearing today, but they do not advance her case. They show, for example, that she, her late husband and their two children were indeed registered as proprietors of the Property, that the Official Trustee applied to be registered in respect of a one half share, with Ms Dugac and her daughter Maria each remaining entitled to a one-quarter share, and that the Trustees requested the Registrar-General to register them as proprietors pursuant to the Supreme Court's order of 7 September 1989. 9 No doubt some of these events, at the precise times when they occurred, did occur without the knowledge of Ms Dugac, although, as I understand it, the Official Trustee at first sought the cooperation of Ms Dugac and her daughter in connection with selling the Property but that cooperation was not forthcoming. It may be that the Official Trustee advised Ms Dugac that if agreement could not be reached, the Official Trustee would apply to the Supreme Court for the appointment of statutory trustees for sale. Be all this as it may, it does not assist Ms Dugac that at the precise times when the Official Trustee became registered of an undivided one half interest, and the Trustees became registered as statutory trustees for sale, she was not aware that those events were taking place. 10 In paragraph 1 of her application, Ms Dugac complains that the Property was taken from her unlawfully and illegally and sold. It was sold by the Trustees who are not parties to the present proceeding. I took Ms Dugac to some of the basic facts of the case, and she agreed that her husband and son had become bankrupt on their own petition. Section 58 of the Act has the effect that where a debtor becomes a bankrupt, the debtor's property, not being after-acquired property, vests forthwith in the Official Trustee. Plainly, the Official Trustee was entitled to become registered as proprietor of an undivided one half interest in the property. 11 In so far as Ms Dugac complains of an act, omission or decision of the Official Trustee, her right under s 178(1) of the Act to apply to the Court for relief had to be made not later than 60 days after the date on which Ms Dugac became aware of the act, omission, or decision of which she complains (s 178(2)). It seems that the only act or decision of the Official Trustee of which Ms Dugac complains is the act and related decision of applying for the appointment of trustees for sale, since once the Trustees were appointed, the selling of the Property and accounting for the proceeds of sale were matters for the Trustees, not for the Official Trustee. The Trustees are not parties to this proceeding. 12 The evidence makes it clear that there is no legal merit in the application and the proceeding should be dismissed with costs. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 23 April 2007 The Applicant appeared in person. Solicitor for the Respondent: Mr M McNally of Lobban McNally Lawyers Date of Hearing: 3 April 2007 Date of Judgment: 3 April 2007